Nambiars to convert advance paid to BPL into equity

BANGALORE/MUMBAI: The Nambiar family which controls the BPL group is back in the thick of action after lying low for a long time. The TPG Nambiar family is converting a substantial advance it paid to the flagship company BPL into equity shares.

The family-controlled entity, Electro Investment, will hike its direct exposure in the company to 43.15% from 8.24%, which in turn will bolster the combined promoter group interest to 74.66% from 61.62%.

The promoter family extended a loan of Rs 92 crore last year in a bid to get the prolonged corporate debt restructuring (CDR) scheme past the institutional creditors.

The promoters offered to bring in the required cash even though the company had initially envisaged raising funds from a foreign investor.

Now, as promoters look to convert the advance into equity, BPL is set to make a preferential allotment of 170 lakh equity shares (Rs10 each) to Electro Investment, which it will pick up at a premium of Rs 34.81.

The Sebi has exempted Electro Investment’s share acquisition from clause 10 and 11 of the Takeover Regulations, with the acquirer being part of the promoter group in control of the company, and the allotment would not result in change in control.

The exemption is also on the condition that the company will maintain a minimum public shareholding of 25% pursuant to the proposed preferential allotment.

Earlier, Ajit Nambiar, CMD, BPL, had told ET the family would not de-list various BPL group companies quashing market rumours in this regard. While the latest development is part of the larger financial rejig, the operational recast, which started off with the hiving off the CTV business into a JV with Sanyo, is expected to be completed in the next four to six months.

BPL, as part of the operational restructuring, will carve itself into four or five strategic business units (SBUs), which will be driven by the market potential and the company’s competitive advantages, said company sources.

The distinct SBUs would cover existing sectors and might pursue new opportunities if any. The existing businesses like healthcare equipments, soft energy, entertainment, electronics, mobile and precision tooling and component manufacturing is expected to forge ahead with technical/ equity JVs in the future.

In fact, the company has projected a Rs 500-crore topline for the healthcare business by ’10, and is similarly bullish on handset business as well.

“We are progressing in that direction even though it is taking some time,” added sources. BPL, the once leading domestic consumer durables company, has been in the midst of a prolonged financial and operational restructuring exercise.

(This article was originally published in The Times of India)

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